Good evening, everyone, and thank you for joining the Thai Beverage first half 2021 results call. All participants have been placed in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. I will now hand over the call to the presenters, Ms. Namfon Aungsutornrungsi, ThaiBev's Head of Investor Relations, and the members of ThaiBev senior management team. Thank you.
Good evening, ladies and gentlemen. Welcome to Thai Bev, the first half 2021 ended the 31st of March 2021 financial results conference call. First of all, we would like to say sorry for the delay because we have some technical issue. Right now we can resume, and we can start the call. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the call tonight, I will start with summary of the first half results, then we will open the line for Q&A session with our management team. For the summary of the first half results, total sales revenue of the company for the first six months ended the 31st of March 2021 was THB 131,252 million , a decline of 4.3% when compared to last year.
This was due to a decrease in sales revenue of our business segment from the impact of the second wave of COVID-19 pandemic in Thailand. Net profit was THB 16,076 million, increased 8.7% compared to last year. This was due to an increase in net profit of spirits and beer business, and due to last year, there was other non-recurring costs and deferred tax utilization related to beer business restructuring. Although there was a decrease in net profit of non-alcoholic beverages business and associates, and a change in net profit to net loss of the food business. ThaiBev's board of directors agreed to propose an interim dividend payment of THB 3,768 million or THB 0.15 per share. For the highlights of the first half 2021 results, the company's spirits business was marginally affected by the second wave of the COVID-19 in Thailand.
It's generated sales revenue amounting to THB 63,876 million, 0.6% decrease when compared year on year, and total sales volume recorded by the business declined 1.2% year on year. Nonetheless, net profit still amounted to THB 12,866 million, an increase of 3.6% year on year, due to a rise in gross profit and a decline in advertising and promotional expenses. The company's beer business recorded sales revenue amounting to THB 53,978 million in the first half, or 5.1% decrease compared to previous year. Total sales volume decreased 5.3% year on year when including SABECO sales, and decreased 7.9% year on year when excluding SABECO sales. However, the company's net profit for the beer business reported a satisfactory increase of 84.2% year on year to THB 2,214 million. This was mainly due to the decrease in distribution costs and administrative expenses.
The company's non-alcoholic beverage business generated sales revenue amounting to THB 7,592 million in the first half, down 12.6% year-on-year, due to a 14.6% decline in total sales volume. However, excluding non-recurring item for other income recorded in the first half of 2020, the non-alcoholic beverage business recorded a significant increase in net profit from normal operation of 98.2% year-on-year due to prudent cost management. Net profit for the period was THB 333 million. The company's food business recorded sales revenue of THB 5,885 million in the first half, a 19.9% decrease year-on-year. The food business was impacted by the second wave of the COVID pandemic in Thailand, which caused concern among consumers about dining out at the restaurants. Business was also impacted by the restrictions on restaurant closing times in certain areas.
Despite efforts to cushion the impact of COVID by enhancing home delivery and takeaway options and by managing costs prudently, the decrease in sales revenue of the food business caused the business to record a net loss of THB 104 million in the first half. The company's international business recorded sales revenue totaling THB 29,832 million in the first half, down 3% year-on-year. Revenue for international beer sales declined 4%, mainly due to the decrease in SABECO sales revenue. Revenue generated by international spirits sales increased by 2% year-on-year due to significant growth of Scotch whisky and Chinese spirit sales. We will now open the call for Q&A with our results. Since we are all working from home right now, tonight we will have Khun Ueychai will be our MC for the Q&A session.
Khun Ueychai is our Director and Senior Executive Vice President and Chief Operating Officer in Thailand Bev. Right now, please go ahead and open the line for the call. Thank you.
We will now begin the question and answer session. Participants with question to pose, please press zero one on your telephone keypad and you will stay in the queue. To cancel your queue, please press zero two. Once again, zero one.
Gentlemen, this is Ueychai speaking. I will manage the Q&A since we are working from home. This is our first time. I will do my best. Before you ask questions, please tell your name and your organization, and then please ask questions clearly and slowly so we can respond to your questions correctly. Thank you. Please start.
Thank you. Our first question we have [Piti Kep] from Kiatnakin Phatra. Please go ahead.
Hi. Khun Ueychai , can you hear me?
Yes, [Piti Kep]. Go ahead.
Hello.
Yes, Piti Kep, go ahead.
Yes, I have just one question. In this quarter, your spirit sales declined almost 3% year-on-year. I'm not sure if you can give us a breakdown between the sales in Thailand and Myanmar, and maybe an update on situation in Myanmar, including your production facility and sales and overall situation. Thank you.
This one I will ask Khun Prapakon to respond to the questions on spirit and Myanmar. Prapakon, please.
All right. This is Prapakon, chief of the spirit business. Since I understand that on our upload, we also show our quarterly breakdown, and it's showing the overall spirit volumes decline, just a very small single digit. The questions you asked have a bit of a feel for. In Myanmar, obviously there are some situations there. The sale volumes in Myanmar declined by mid-teen, in term of percentage for the quarter. In Thailand, our white spirit still continue to grow. The reason why the total volume of spirit slightly decline, because we have a decline in brown spirit sale. It's twofold. One is last year, same quarter, we actually have price increase. There's quite a fair bit of volume loading in the second quarter of last year. As for this year, there isn't.
The overall consumption of brown spirit, you could imagine, given the disruptions in COVID wave two in January, and it has impacted the consumptions slightly. The two combined, showing the brown spirit in the second quarter coming down slightly. Overall, as you can see, profitability is an EBITDA in both second quarter and the full six month have improved in the spirit business. Actually, that's also helping with our other international business in Scotland. Although they're small, they are improving, and they also remain profitable. Just to cover on Myanmar situations. We run Grand Royal Whisky, the number one whisky business in Myanmar. We own 75% of this business together with our local partners. The situations as of now, I would say as of now, meaning as of early May, these first two week of May, have improved by a lot.
If you have followed the news in Myanmar, you have seen that in February there's a lot of disruptions. Banking system shut down and continue to disrupt it through the Water Festival in early April. Then in mid-April, the Water Festival basically have a 10-day holiday. The country gone into more quiet. In the first two weeks of May, the situation today, I must say it's improved by a lot. Basically, in February and March, what we have sold, we have to collect in cash because the banking system is not operational. As of now, we are back to be able to collect money through the banking system up to 80% of the sale. Remaining 20% still collect in cash. We are paying our employees in cash because the banking system for the employees are not quite adequate, long line at the ATM queue.
In terms of the cash collections, they are back to close to normal. In terms of logistics, we no longer have any more logistics backup, and we have enough supply, packaging material and everything for us to continue productions. We continue to focus on sale and focus on collections, and we do not have aging issue of our receivable. Our headline sale generally about 10%-15% down from normal period. I think that scope gives you much comfort as to some impact that we have to take on with the Myanmar ops. Thank you.
Right. Khun [Namfon], I have follow-up questions, if I may. Since the situation has improved in May, should we expect improvement in sales as well? Have you experienced any improvement in sales? The second question, there are certain listed companies in other country that set up provisioning against investment in Myanmar. Judging from what you said, I don't think your situation, Grand Royal's situation, is that severe. Is it fair to say that the risk of provisioning against Grand Royal investment is low? Is it a fair statement?
We do not expect to make any provisions as of now to our Myanmar operations. I think the acquisitions that we took on in October 2017, there is actually quite a good size of good deals. We have measured that, and we believe the business actually, today, the business make more money than when we even bought it. Even with 10%-15% decline in sale, we're still making a good EBITDA level. I think, yes, some of our businesses that operate in Myanmar have to make provisions, but our business still remain very solid given the situations.
Right. Okay.
[Kiti Kep], I'm Ueychai here. I'm the co-chairman of the company. We have to admit that the situation is very difficult there. As the chairman of the company, I'm very satisfied with, very happy with the outcome. It's a lot better than I expect. Even though the sales have some pressure, we try to sort of maintain our profitability there. The management there is doing well. We have a good management team there. Also a good partner there. I'm still very confident on the GRG or the Myanmar business until.
Right. Glad to hear that.
Hello. Sithichai, I will add in. I would like to add in Khun Ueychai and Khun Prapakon. For the auditor, KPMG, one of the auditor techniques, they have to check the valuation, the impairment of the investment together with the goodwill. Yesterday, we have the audit committee meeting. KPMG, they confirm by the income approach, DCF. They still support our all investment in ThaiBev and still have no effect for any impairment of the investment of either the goodwill and then still have the goodwill, have a headwind to go. Yeah. We are not touched enough. We have a headwind for who compare to our investment, so no impair anything on this one. I would like to add this.
Right.
Thank you, Sithichai.
Right. Okay, that's really clear. Yep. Thank you very much. That's all the questions I have. Thank you.
Thank you. Next question, please.
Thank you. Next, we have Nicholas Teh from Credit Suisse. Please go ahead.
Hi. Just two questions from me. Wanted to check if you could update us on the beer market share in Thailand, and also, I guess given the situation now, wanted to just understand a bit more on what you can do with your marketing and whether you've seen Boon Rawd react in any way, given that you guys have gained more market share from them over the last year or so. Just wanted to clarify one thing on what was said on the spirits volumes earlier. Am I right in saying that white spirits continued to grow, whereas the brown spirits declined a bit year-on-year? Overall, is Thai spirits a bit flat and the decline is more so in the Myanmar side?
I will address the second question so to save time. What are you saying is correct. Our white spirit is still growing, and then brown spirit, because of its nature, some of them is consumed on-premise, so it decline. Overall, it's flat, you are correct in term of volume. The profitability, as Khun Prapakon has mentioned, is still growing nicely. Okay. On the beer questions, I would like Lester to address that, about Thai beer market address. Lester, please.
Yes, sir. Thank you. Good evening. This is Lester here, heading up the Thai beer business. You talked about the market share and our A&P spending and how the competitor are going to respond. Let me take that step by step. Our market share at the moment now is close to 40%. While the market has declined, earlier you heard Khun Namfon give the overview that revenues have come down. The beer market has actually declined by about 10% this year. While our share is close to 40%, we've actually picked up share during this period over the competitor. We've done this with reduced A&P spending, obviously because of the COVID period. Moving forward, do we think that they will pick up their A&P? Hard for us to say.
What we're saying is what we feel internally is that we've done very well picking up share with reduced spending, and we would like to keep it that way. Moving forward, we want to focus on the more efficient areas of A&P, spend more on that where we get volume and share returns, and cut down on the parts that don't give us as good returns. Moving forward, we expect to pick up more share at reduced spending compared to a year ago. Thank you.
Thank you, Lester.
Okay, thank you.
Thank you. Any further questions? Do you have any other questions?
No, I'm okay. Thank you.
Thank you. Next, we have Divya from Morgan Stanley. Please go ahead.
Thank you. Good evening, Khun Ueychai. I just had two questions. The first question was just on the raw material and packaging costs. I noticed that it's increased for both the spirits as well as the beer business. Just wanted to get a sense on how you're seeing that going forward, and should we be expecting some price hikes to be taken to offset that? A question related to that is just, if I look at the implied domestic beer ASPs, they seem to have increased a bit year-on-year. Wanted to get a sense if there's a change in mix in the beer space in Thailand, or is it some sort of pricing hike that has already happened? This is the last question is on just the quarter-to-date trends, because last year April basically had no sales in Thailand for alcohol.
Now we are again going into a restriction period. If you could help us understand, on an aggregate basis, quarter to date, what are you seeing in terms of volume trends for both beer and spirits, that would be very helpful. Thank you.
Okay. There's three question on the raw materials. On the beer, I will ask Dr. Pisanu to respond that. Spirit, I will ask Khun Prapakon to respond that. In terms of beer domestic ASP, I think Khun Lester can look into it. I don't know whether it's Vietnam or in Thailand, but please prepare. On the third questions, I'm just respond myself. Yes, you are right, because last year, April, we only sell only one week, but this year we have a four-week sale, so cost is look good. That's all I can say. Nothing much. The third question is answered. Now the first question, Dr. Pisanu , please.
Yes. You are dead right. The commodities all rise up, skyrocketing. However, we are so lucky in the way that we have booked the beer malt, ahead of the game until next March. We are really well set on the key raw material. Also, the hops, we have already booked in advance. May I also help Khun Lester to answer you about the packaging cost of the beer production. We are doing not bad at all. We are doing something like over 60%, but not quite 65% as we targeted. Of course, along the year, we will achieve the budget of 65% or a little bit over that for sure to use a returnable bottle. Thank you very much for your question.
Thank you. Thank you, Dr. Pisanu. Divya, you ask this question again next March? It's okay?
Very .
On the spirit, Prapakon will respond to your question.
Divya, can you repeat your questions again, please?
The raw materials. Go ahead, Divya. Go ahead.
Okay. Prapakon, I was just wanting to know that raw material and packaging costs have gone higher, but despite that, the spirit gross profit margin also improved. Can you just comment on what's driving that improvement, and how should we think about it in terms of April and May, if you have any I know Khun Ueychai answered, but just wanted to get a sense that when you look at it on an aggregate basis, how is the current sentiment on the volume run rate?
Okay. I will comment it on Thailand first, because I think the majority of our spirit business, over 90%, is still coming from Thailand. In terms of raw material, there's a bad part. The negative part is there's somewhat higher molasses input cost. People who've seen the news, they know that molasses for this crop is a bit short compared to year or two ago. That's why price is moving up a bit. We have changed the packaging material or changed bottle shape of Hong Thong brown spirit 700 mL. We switched to 100% new bottle for the time being, and hopefully, in the future, we will get more used bottle coming back in about six-month time. The positive side is that the collection of our white spirit bottle, we use, because our majority of our volumes in Thailand are actually white spirit.
White spirit bottle for Ruang Khao, the use rate that we can collect and use are improving, moving to our target range. These have started to pay off. These two are offsetting each other. That's why we have a good control on cost for this six month. A&P wise, because this six month is compared to a six month years ago, prior to COVID. Actually, COVID have been around with us just about a year. I think didn't really hit Thailand till late March last year. The six month prior year actually have no COVID, and therefore we have good spending in term of A&P. That A&P have been tightened because we continue to live in this new world of new normal, and we have
Basically use less spending on A&P in both brand and trade marketings. That's why the two combined giving us a higher profitability. Okay, Divya, I hope that explained.
Yes. For Prapakon, there's no need for you to take a price hike in spirit. Is that something that would be considered or it's not required given where your raw material costs are locked in?
If there's an opportunity to take price hike, I'll take it any day and every day. It's just that the opportunities have to be reviewed. I think we run a very profitable business, but in any cost approach, if there's an opportunity to move price up that will not impact our long-term sale volumes, we will do so. I think we have certain review. In last year, six months last year, we actually took price up on brown spirit prior to COVID. Yeah.
This year, when we look at brown spirit on six months, I think the decline somewhat have to do with overbuilding stock from price increase and somewhat decline consumption due to COVID, and it's not really due to price increase. I think we are quite safe on that. As far as white spirit, we haven't taken price increase for the past two years. You're asking the right question. We're looking at the opportunities.
Okay. Thank you.
Thank you, Prapakon. Next question, please.
Thank you. Our next question w e Tunde Ojo from Harding. Please go ahead.
Hi. Thank you. This is Tunde, from Harding Loevner. Actually, my first question is on raw material cost inflation, which you've answered from the previous question. Thanks for that. I also wanted to ask a bit more question on Vietnam, SABECO. Two questions there. First would be on the drunk driving law. I know there's been no mention of it recently, but I wanted to ask if that law is still there and if it's impacting volume trends in Vietnam.
Hello. Hi, Ojo. Sorry that we got disconnected for the Vietnam side. Do you have other-
Okay. Hold on
questions regarding Thailand?
Hold on, Namfon, stop. Michael, maybe you can answer that. The Decree 100, what is the impact? Any impact? Is it worse or better? Michael, please.
I think the Decree 100 is still there, and obviously, it still has an impact, but certainly not as bad as when it was initially implemented in Vietnam. I think people get used to it after a while. During the current situation, it's very hard to see the impact, especially when the COVID pandemic has caused a shutdown on many restaurants and pubs and other establishments in some part of Vietnam. I think that would be the current assessment. Thank you.
Yeah. This is one time. I think from our experience in Thailand, same thing happened. In the beginning, everybody is so tight. The consumer are tight, are really, really excited, and the governments are very tough. After a while, the consumer are used to it, and the government are loosening up a bit. Actually, this is the same thing that I'm seeing now. Thank you.
Thank you very much for that. Thanks. That's very clear. The second question is on the new product in Vietnam, Saigon Chill. My last update was that it's been launched since last year. You guys had some problems with the channels, with competitors trying to block it. Has there been any update on that in terms of being able to address that issue? How has the reception of that new product been since it's been about six to eight months now that it's been launched? Has it been good? Has it been beyond your expectation or below your expectations?
Okay, Ojo, let me check with Bennett. Bennett is coming back. Is Bennett there? If not, Ojo, I have to leave this question when Bennett connect back again, okay?
No problem at all.
I will hold that now.
No problem at all.
Thank you, Ojo.
Okay.
Thank you.
Maybe we move to the next question. Yeah, thank you.
Our next question, we have Cezanne. Thank you. We have Cezanne from CIMB.
Hello, everyone. Thai Beverage Management, can you all hear me?
Yes, go ahead.
Hi, Khun Ueychai. Thanks for the call. Good to hear from you again. I just wanted to check, on the A&P, you have done really well in terms of cost control. I also noted that there was mention of market share coming up despite this A&P not being spent. Can you just give us some color on what you have been focusing on and maybe what the measures have been? Previously, pre-COVID-19, A&P was actually one of the biggest things that helped to drive this market share. What are the big changes, if you could share, please?
Is it beer or spirit that you're asking?
It would be beer. That one.
What country?
Thailand.
Okay, Lester.
Where we got already those pubs. Yeah.
Thank you. Lester, it's your call. After Lester finish, Bennett is come back. I will ask question to Bennett.
Okay.
All right. Hi, Cezanne. This is Lester here.
Hi.
That's a really good question. What we would have done, obviously, because of COVID, a lot of the big events were canceled or postponed. Mainly canceled, especially at the end of the year, the December period. In December period, there are a lot of beer parks and lots of festivals going on. Also during the cool season, lots of music festivals going on. All those were canceled or postponed to a later date, probably next year. Big savings there. What we did actually is to use the money for distribution. What we tried to do is to improve our distribution and therefore getting the sales. At the end of the day, it's a lot of sales-driven activities now rather than the big events and big mega events to build a brand.
Okay.
That's the main part of distributions.
I see. The last call, I think there was some talk about vans going around and all. I can't remember whether that was more for spirits or the beer side, or is that across the board in Thailand? Is that one of these distribution measures that you are referring to?
The distribution that we're doing is more area management. We get very focused into selling into outlets. Selling into the outlets first, and then if we are already sold into improve the sales per point of distribution. It's really down to at each particular individual area around the country, our guys are pushing out and getting more distribution, getting more sales per point of distribution.
Okay, got it.
The big effect for sales really is to get our stock out there. When we increase our stock rate, the sales volumes go up, and that's what we've been pushing on.
Okay. Got it. Thank you.
I'd like to add that because I think there are two wars for both beer and spirit, the off-trade war and the on-trade war. The on-trade, because of the COVID, we stop, because I think we have to admit that the on-trade, the more you spend money, the more you win, and then the competitors spend a lot of money. On the off-trade, we are very strong compared to the competitors. We have 1,200 cash van running around the country, covers about 300,000 outlets out of the 450 universe. When COVID happened, people are moving back. Workers are moving back to their home.
Yeah.
They're going to the upcountry. Actually, we are very strong in that area. We are lucky to increase the number of cash van, 200 cash van last year, on time with the COVID coming in. I think that is the advantage and benefit that we get on the beer side. Okay?
Got it.
Thank you. I would like to go back to Ojo questions since Bennett is here already. Bennett, Ojo asked about, you give a color on the new product on your Saigon Chill. Would you give the response to Ojo, please?
You asked during our quarterly briefing just about a week ago, right? My answer is still the same, is within our expectations. We think that it can grow even faster, and that's why we invested a little bit more in the first quarter of the year. That's why you see selling expenses in the first quarter increase. In short, I think it's within expectation, we think it can improve, and we're investing more in the brand.
Okay. Clear. Thank you.
Thank you. Is there any follow-up questions for them?
Thank you.
Okay. Thank you. Our next question, we have Permada from UBS. Please go ahead.
Hi. Good evening. Thank you for the opportunity. My first question is, in mid-April, I read from the local papers that the government was talking about potentially increasing excise and introducing new tax measures, like for new products like canned drink, and also tax for existing categories like alcohol. Any color on that in terms of the latest thinking from the government?
You read from the local newspaper, what country?
Thailand.
Thailand. I'm in Thailand. Let me respond to that question. I think the government, if they're not busy with the pandemic, they're always talking about tax, right? That's quite normal. We didn't hear anything yet. Normally, we will hear things two, three months ahead. At the moment, I have to say that we haven't heard anything moving on that tax yet. I cannot guarantee that the tax will not increase, because at the end of the budget year, they probably discuss again. The budget year here is in September. This year, they spend a lot of money on the COVID pandemic things. They may talk about it, but I didn't hear anything yet. I didn't hear anything on the spirit or on the alcohol yet.
In response to that, I think Khun Thapana previously was also mentioning that as increasing prices as part of an excise management strategy. Is management going to try to increase prices ahead of potential excise increase?
No. Right now the tax systems is based on the percentage on price. The minute you increase, then the tax increase. That's why I believe that because of the new system, now based on your retail price. The government will not increase the tax in term of rate very much, because the minute you increase your price, your tax is coming in. I think what we do, one thing we can assure you that if anything happen on the tax or rate or tax rate, our policy is to maintain the margin percentage, not even the absolute margin in baht, the margin percentage, which mean that if the tax increase THB 10, we probably have to increase like THB 14 to cover the margin. Okay. That has been practiced during the past 16 years that I'm in this company. Thank you.
Clear. Thank you, Khun Ueychai. Second and last question. With the deferral of the potential beer IPO, are there any other sort of potential strategic actions that management is exploring to maximize shareholder value? I mean previously in 2019, Khun Thapana was saying that he was open to collaboration with international brewers, partly the rationale to look at opportunities to deliver, as well as knowledge transfer, product capabilities transfer, and those rationale continue to hold. Are there any sort of other measures that you'll continue to explore to crystallize value?
I think what Khun Thapana has mentioned earlier has covered everything, and we're still exploring that seriously because we're still open for any opportunity coming in. For the shareholders, I think we are make sure that we can enhance the shareholder value anytime there's an opportunities. That I can respond for Khun Thapana like that. Thank you.
Thank you. Thank you so much and all the best for the quarter ending June, of course I hope the situation improves in Bangkok. Thank you.
Thank you. We need that.
Thank you. Just a gentle reminder to all our callers, if you'd like to raise a follow-up question, you may press zero one on your telephone keypad. Our next question, we have Xuan from Goldman. Please go ahead.
Hi. Good evening, management. Thank you very much for the opportunity. Firstly, it's a housekeeping question. I just want to clarify for spirit. Just now we mentioned about the roughly flat volume for domestic spirit and the mid-teen kind of decline in the Myanmar side volume. Was it referring to just the March quarter itself, or is it a six-month performance? That's my first question.
It's both. We'll have about mid-teen decline for the six-month year.
Right. Both the quarter and the half year, the six months is both the performance is similar, like flat and mid-teen, flat for domestic.
The first quarter declined due to COVID. There was some COVID problem also leading to the election. The second quarter have to do with the change in political environment. Okay.
Right. Understood. That's for Myanmar, right? Yeah.
Right.
Okay. Got it. I wonder if the domestic ones, if possible, that you could break it down for us for the December quarter and the March quarter. Is the volume quite similar or flat year-on-year, for both quarters?
I think it is flat. Our six-month domestic volume in Thailand is flat. I mentioned that there's a decline in brown and the increase in white. Very low, though. Our overall six-month number remains about flat compared to last year.
Okay. Thank you very much. My second question is on the beer side. I do notice that the overall beer, in the March quarter itself, in terms of the gross margin, there is a slight decline year-on-year. Just now I know that the management has elaborated, but it seems to suggest that our gross margin are pretty robust. I just wonder what has been causing some of this gross margin decline in the beer. It looks like the backhold, the gross margin is actually expanding year-on-year. I wonder whether that may imply that the domestic gross margin is under a little bit of pressure on a year-on-year basis. Yeah. Thank you.
You refer to Thailand or Vietnam? Please.
Beer.
Beer, overall beer?
Actually, we only have the overall beer growth margin number. We can only imply what should be the domestic. It would be good to have more color, yeah, on the domestic side.
On the gross margin, Khun [Thammoporn], did you notice that? You know the reason?
I think Khun Ueychai. I think the main reason for it is, I think also Pisanu did allude to it that our target bottle recycling rates were not hit yet, although we are heading that direction. Less usage of bottles, plus there's some slight increase in some raw material costs as well.
Okay. Thank you, Michael. Thank you.
Okay.
Yeah. Don't worry.
My last question.
The returnable bottle, the returnable usage percentage will be increased. For sure. Don't worry. Okay. Go ahead. Your last question.
Okay. Got it. Last question is in terms of the debt management, I understand that we refinance the bonds with some bridging loan. I wonder, the bridging loan in terms of the average interest cost, what it is? Versus the bonds that we pay down. It would be great to have some color on that.
Thank you. This is Khun Sithichai. Can you respond to this question? Bob can support.
Yeah. Sithichai speaking. Our debt view on March this year, total THB 42.8 billion. Average cost is about 2.5% per annum. Our bridging loan, two-year bridging loan withdraw on March this year, renew another two year. Average cost, average interest rate is about 1.7% only.
I see. Thank you very much.
Thank you. Thank you. Thank you, Khun Sithichai.
Thank you. Just a gentle reminder, if you would like to raise a question, you may press zero followed by one on your telephone keypad now. Once again, that will be zero followed by one if you would like to raise a question.
Mike, I think that there should be no more questions. Now, Thonn, you can thank the attendees, please.
Sirana, we can close the session. Thank you everyone for joining Thai Beverage conference call tonight. If you have more questions, please feel free to contact IR department at ir@thaibev.com. Thank you and have a good night.
Thank you. Ladies and gentlemen.
Thank you all. Thank you
This concludes today's conference call. Thank you for your participation.
Thank you.
You may now disconnect.